County program saves big on prescription costs — with help from Canada

Schenectady County has cut its prescription drug costs by more than $2 million per year over the past six years, in large part by buying employees' medications from Canada, county officials said.

The cost of the Schenectady Meds I prescription program was $5,644,021 in 2010, but dropped to $3,637,641 last year -- a savings of more than 35 percent annually during a time in which nationwide prescription costs rose 27 percent, according to the Kaiser Foundation.

The county began buying prescription drugs provided under its union health benefit contracts from Canadian pharmacies in 2004, a point when it was already known that Canadian drug prices were much lower than drug prices in the United States.

County Attorney Chris Gardner said the major changes have included adding a co-payment penalty for employees who don't use the mail order system to fill routine prescriptions. That has increased employee participation from about two-thirds to about 95 percent. The county has also benefited from the number of new generic drugs that have come onto the market, Gardner said.

Routine "maintenance" prescriptions account for about 60 percent of all prescribed drug use by the 1,700 county employees and family members who are covered under the program.

"The combination of incentivized mail order, our landmark Canadian Rx program and our other reforms have resulted in significant savings for all of our taxpayers," said Deputy County Board Chairman Philip Fields, who is chairman of the Committee on Ways and Means.

County officials said a good working relationship with the county labor unions has also contributed to the savings.

The most commonly prescribed drug in recent years was Lipitor, which is used to treat high cholesterol, though it has likely be superseded by its generic equivalent, Gardner said.

In October, the county changed its U.S. pharmacy benefit manager to ProAct, which is expected to bring additional savings -- perhaps as much as another $1 million -- during 2017.

Gardner said he didn't think the county's arrangement to buy from Canada would be impacted if President Donald Trump sought to re-open negotiations on the North American Free Trade Agreement, which regulates U.S. trade with Canada.

"We're in an unusual situation," he said. "The Obama administration was openly supportive of using Canadian drug companies, and President Trump, to his credit, has called for vigorous negotiations with the drug companies."